David Politis from Deseret Business Watch | Recursion IPO, Sera Raises $100MM, Wasatch Invests $100MM, and More (The Week-in-Review, April 24—30, 2021)

Back on March 30th I wrapped-up a Deseret Business Watch feature story this way:

“… congrats to CEO, Chris Gibson and the entire Recursion team for its forthcoming IPO.

“Should be a fun ride!”

Turns out I was right — it was a half-a-billion-dollar ride!

Recursion IPO Generates over $500 Million

Two weeks ago today, shares of Recursion Pharmaceuticals began trading on the Nasdaq Global Select Market under the stock symbol RXRX.

Including the underwriters’ option of 3.6 million shares, Recursion sold 27.878 million shares at $18/share, raising nearly $502 million in the process (before IPO expenses).

However, Recursion shares opened at $26.32 when actual trading began on April 16th, not at $18, a nearly 50% pop.

And as of market close today, Recursion stock was priced at $33.40/share, giving the company a current valuation of over $5.5 billion (based off of 153 million shares outstanding).

As explained in the March 30 write-up,

“Recursion has developed what it describes as the Recursion Operating System (Recursion OS) to allow it to achieve what it claims is a faster and faster flywheel effect for drug discovery and development.”

According to the company’s website, Recursion has

• Four compounds in Phase I Clinical Trials,
• Two compounds in Pre-Clinical Development, and
• An additional 29 diseases where it has identified (and is developing) targeted compounds to address these disease states, with said compounds in Early Discovery through Pre-Clinical Development.

By my calculations, Recursion has close to $750 million in the bank post-IPO, giving it a solid runway to get its most promising drug candidates close to market clearance by the U.S. Food & Drug Administration.

Congrats, Recursion. Congrats indeed.

{NOTE: One of the challenges of producing over 4,000 words of original reporting each week in what is essentially a passion project for yours truly is the fact that I sometimes miss something. And for whatever reason, I missed the announcement on the Recursion IPO. Ugh! Hence, my write-up on the Recursion IPO is leading this week’s Week-in-Review write-up; but honestly, it should have been in last week’s issue. Apologies.}

Sera Prognostics Completes $100 Million Series E Financing

Unless you or a loved one is at risk for an Early Term Pregnancy, chances are you’ve never heard of Sera Prognostics, which is too bad because it sure looks like Sera is onto something.

Salt Lake City-based Sera was formed in 2008 and “licensed its serum proteomics discovery technology and novel peptides from Brigham Young University and the University of Utah.”

Its PreTRM® Test allows physicians to identify which women are at risk for pre-term birth during the 19th and 20th weeks of a pregnancy.

According to the 2020 March of Dimes Report Card, of the 3.8 million live births in the United States each year, over 10% are born prematurely. And preterm births (pre-37 weeks) are the leading causes of illness and deaths among newborns.

So … maybe it’s the fact that I got to hold our 11th grandchild for the first time yesterday (he’s amazing, by the way), but I am hypersensitive to the needs of pregnant moms and their families these days.

That said … am I surprised at all that Sera Prognostics announced this week that is has raised $100 million in a Series E round of funding?

Ha! Not at all.

Heck, they even call themselves “The Pregnancy Company.” (Great tagline, BTW.)

So congrats, Team Sera. May you find great success with PreTRM and all of the other products/services you have in your product pipeline.

Wasatch Global Investors Ups its Bet with a $100 Million PIPE in an Upcoming Winery/SPAC IPO

If you’re in Utah’s business community, I’d suspect that chances are better than 50-50 that you’ve heard of Wasatch Global Investors.

And if not, it’s a 45-year-old, Salt Lake City-based investment firm with over $34.4 billion in Assets Under Management (AUM).

Turns out that Wasatch placed a $100 million bet earlier this week when it announced it was buying 10 million shares of a SPAC that was merging with a California winery.

For those not familiar with the term, Special Purpose Acquisition Corporations (sometimes known as “blank check” companies), are created specifically with the purpose of raising money through an IPO so they can then turn around and merge with an existing, operational firm, taking that operating firm “Public” in the process.

In essence, it’s a Reverse Shell Merger. The difference is, in most cases the SPACs go public first on a big time stock market, like NASDAQ or the New York Stock Exchange instead of “Over-The-Counter (OTC)” or in a Pink Sheet-listed company.

SO … Bespoke Capital Acquisition Corp. is a SPAC that has announced a merger with Santa Rosa, California-based Vintage Wine Estates, and post-merger, Vintage will have ~$360 million in its coffers and be a NASDAQ-listed company.

Typically, news about two organizations not based in Utah would not hit my radar, except in this instance, Wasatch invested $28 million in Vintage pre-merger. And now it’s buying 10 million additional shares in Vintage at the offering price of $10/share.

Bottom line — that’s why this $100 million investment is included in this Week-in-Review edition of DBW.

HealthEquity Acquiring Fifth Third Bank HSAs for $60.8 Million

Draper-based HealthEquity (NasdaqGS:HQY) announced this week it will spend $60.8 million to acquire the Health Savings Account portfolio of Fifth Third Bank.

According to Wikipedia, Fifth Third is the 17th largest bank holding company in America, with nearly 150,000 HSA members currently and over $475 million in HSA assets.

When closed, the acquisition of the Fifth Third HSA portfolio by HealthEquity, the Draper-based firm will continue its recent activity to grow its position as a leader in the HSA management space both through acquisition and organic growth.

Myriad Genetics Selling its myPath Melanoma Laboratory to Castle Biosciences for $32.5 Million

Salt Lake City-based Myriad Genetics (NasdaqGS:MYGN) announced this week it is selling-off its myPath Melanoma Laboratory business to Castle Biosciences for $32.5 million.

According to the company’s press release, roughly 40,000 of Myriad’s myPath Melanoma tests have been ordered by close to 20% of the dermatopathologists in America. These tests have then been evaluated by the myPath Melanoma Laboratory.

The sale will allow Myriad to concentrate its focus on its core businesses in Women’s Health, Oncology, and Mental Health and provide growth capital for future investment.

Naturally, the fact that Castle Bioscience is a specialty laboratory focused on advanced diagnostics for dermatologic cancers makes even more sense from an acquisition standpoint.

Other News Items of Note from This Week

What follows below are 10 additional Noteworthy News Items taken from the breaking news announcements that hit our radar this past week from Utah’s business community, news items we thought you might find worthwhile if not also intriguing.

Case in point —

Vivint Smart Home Agrees to Pay $20 Million to Settle Claims by the FTC that it Misused Consumer Credit Reports

In the largest case ever brought under the Fair Credit Reporting Act by the U.S. Department of Justice, Vivint Smart Home agreed this week to pay $20 million to settle claims by the U.S. Federal Trade Commission that it (Vivint) had misused consumer credit reports.

Under terms of the agreement, Provo-based Vivint (NYSE:VVNT) will pay $15 million as a civil penalty and an additional $5 million “to compensate injured consumers.”

You can get the full skinny on the case and settlement by reading this FTC news release.

Transfer of Medici Ventures’ Blockchain Assets to Pelion Venture Partners Completed

Back in late January, Midvale, Utah-based Overstock.com (NasdaqGS:OSTK) announced it planned to transfer the Blockchain Assets of its venture capital subsidiary, Medici Ventures, to Salt Lake City-based Pelion Venture Partners.

Well … as explained in this Overstock news release, that deal is now done. Thought you’d want to know.

Pleasant Grove Signs $18 Million Contract with UTOPIA

The headline above pretty much says it all:

UTOPIA Fiber is going to build-out a fiber optics backbone network throughout Pleasant Grove, Utah at an $18 million price tag.

The contract is expected to be completed within the next two years, and when done, will enable every PG-resident and business to sign-up fiber-based Internet connectivity with any of the contracted Internet Services Providers.

As of today, residents can expect connectivity speeds of up to 10 Gigabits per second, while businesses will get up to 100Gpbs, which UTOPIA claims are top speeds in the U.S.

Former CEO of Boston Scientific Joins Xenter Board

When a startup announces it has landed a new board member who was formerly the President and CEO of publicly traded company, I tend to pay attention, especially

1. If former President & CEO quadrupled his company’s revenue to $8 billion from $2 billion during an 11-year period, and
2. If that new board member has previously worked with the founder and CEO of the startup.

Since both statements are true, congrats to Salt Lake City-based Xenter for landing former Boston Scientific President & CEO, James R. Tobin, as a board member. Click here to read the news release.

And for the record, make no mistake about it, this is actually a pretty big deal.

Savage Opens New Rail-Port in Tooele

Seventy-five-year-old Savage, a Salt Lake City-based global transportation and logistics company, announced this week it has opened a rail-port in Tooele, Utah.

This new facility is one of 50 rail terminals Savage owns or operates in the U.S., Canada and Mexico. In fact, the company has nearly 4,500 employees at over 200 locations.

ICYMI: What are the Top Direct Sales Businesses in the State?

Consider this a postscript, but on Wednesday I published my take on the direct sales sports industry in Utah with an article titled — Top 10 Direct Sales Firms in Utah.

So if you haven’t read this yet, I invite you to check it.

And if you like it, I hope you’ll feel free to share it with your friends/fellow fanatics. Thanks.

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About the Author

David Politis is a Marketing Mercenary, which is a fancy way of saying that organizations and individuals hire him to solve their marketing problems. To learn more, please feel free to visit David’s LinkedIn Profile or the website for his business: The David Politis Company. If you have a story idea for him (or would just like to connect), you can reach him at me@davidpolitis.com.